This report demonstrates that climate change and its impacts are likely to alter a number of conditions that are material to the objectives of financial institutions. If changing conditions are not actively managed, investments and institutions may underperform. Most investments will be channeled through financial institutions. Given that the main effects of climate change are now well established, there is a considerable opportunity, as well as a responsibility, for these institutions to take a leading role in adaptation to climate change. Institutions managing investments in long-lived assets have both a direct financial risk to consider and the opportunity to create value by working proactively with their clients and other stakeholders to take steps to manage the risks. Going forward, International Finance Corporation (IFC) will initiate the development of more general tools addressing climate risks and investments.
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ENABLING PRIVATE INVESTMENT IN CLIMATE ADAPTATION & RESILIENCE
This report identifies ways to overcome key barriers to private sector investment in adaptation and resilience, laying out a coordinated and data-driven Blueprint for Action to help governments and their development partners to close the adaptation finance gap. Although climate adaptation finance flows have increased by 35% in recent years, they still fall short of what is needed to avoid severe economic and human impacts from climate change. The urgent need for boosting investment in climate adaptation and resilience cannot be overstated. The blueprint provides five entry points to enable private investment. The Blueprint for action we propose in the report represents a novel coordinated framework for action for governments to develop, finance, and implement priority adaptation and resilience investments – driven by countries’ goals and national investment plans that can help accelerate and scale up investment to address the climate resilience needs of the world’s most climate-vulnerable communities and economies.